ETHBTC Update: As these two markets retrace timing a new long position in ETHUSD is not easy because there will be many false starts and a ton of noise. To help filter out the noise, an evaluation of this pair provides clues and a much clearer picture as far as when to expect a more supportive environment.

A couple of traders have recently brought this pair to my attention along with ETC because they have been valuable in providing more clues about the ETHUSD price action. And it makes sense because many investors who are in ETH, have bought into it with BTC . And looking at this chart after the recent pull back in ETHUSD , it appears this market offered many hints that the upside was very limited when ETHUSD was pushing the 390 area and as one trader said, "Everyone was painting rockets." (That is hilarious and so true).

So after evaluating this pair further, there are levels on this chart that can signal when consistent buying returns to the ETHUSD market and can help form more reasonable expectations, and not "rockets".

First let's begin with the broad Elliott Wave perspective and what it means for the long term. Clearly we are in a Wave 2 and these are corrective waves that often unfold as some form of triangle or range bound market. The good news is that when Wave 3 unfolds on this degree, it implies that ETH has the potential to reach targets like 460 and into the 500s. The not so good news is that it has quite a few resistance levels that must be compromised along the way before ETH has that kind of potential and at the rate ETHBTC is moving at the moment, this can take weeks or months, especially in light of the current bearish momentum.

So in order to signal that consistent buying is back in the ETH market, this pair needs to break the .07356 minor resistance which is the .382 of the current bearish swing. Until that happens, do not expect much on the upside anytime soon. No rockets here, more like rocks. That would prove bullish momentum is returning, but after that it needs to take out the .07783 to .08092 resistance zone followed by the .08306 to .08781 resistance which is where it peaked (and established a lower high) when ETHUSD was in the 390s. Both of these zones are .618 areas of the recent bearish swings and serve as good reference points to help evaluate the upside potential of ETHUSD .

In light of these levels, current price momentum is still bearish and is more likely to test supports before stabilizing. The first level is the .06598 which is a triple bottom but because of the lower high established at .08482, price is more likely to break this support and retest the .06248 to .03894 area which is relative to the .618 of the previous bullish structure. This kind of price action is typical of a Wave 2 because remember the rule is Wave 2 does not retrace more than 100% of Wave 1.

In summary, this pair is still generally bullish on the big picture and offers plenty of opportunity to buy into just not right now. If you are day trading, there will be many opportunities long and short in the ETHUSD pair as ETHBTC fluctuates between these support and resistance levels but if you are trying to position for a longer time horizon, this chart clearly shows now is not the right time. Price action indicates more bearish signs and until a resistance is taken out, you are better off waiting if you are looking to establish a new long position or add to a core position. It is a lot less stressful to build positions in short term bullish momentum than bearish , even though you may not get the "best" prices, you get to sleep better at night. As a swing trader I will be observing this chart to help guide my decisions in the ETHUSD market. And thanks again to the traders who brought this chart to my attention.

Comments and questions welcome.

Again I want to thank the Tradingview community for your support and loyalty, as of today I have over 2k followers. I am very happy to know my analysis is helpful to everyone.

Facinating. If we look at the BTCUSD chart, we see that it currently appears to be in the early stages of a corrective wave 2. And this corrective wave has the potential to bring us down to the $2500 level and possibly lower. This isn’t a crash, just a healthy correction which is needed in order to provide support for new all-time highs. What’s interesting about the BTCETH pair is that, when/if this happens, since ETH has (likely) already completed its wave 4 correction, this would result in a a kind of “flippening” where people are exiting BTC. But where are they going? Many will be moving into ETH. And so, concurrently with the BTC correction, we may be looking at ETH reaching all-time highs simultaneously, and this ETHBTC chart may start showing exactly that, with a return to all-tme ETHBTC highs well in excees of 0.15 and perhaps as high as 0.2 or greater. This would be a great time to unload a portion of ones ETH portfolio for BTC, using highly priced ETH to buy relatively cheap BTC. I'm going to be keeping my eyes peeled for $2500 BTC and $500 ETH.

@sgemini, @sgemini, hehe thank you. Do not go by GDAX prices. You have to use the Coinbase equivalents, because my evaluations are based on Bitfinex prices. You need to add like 20 points to all the levels if you are watching ETHUSD on Coinbase of GDAX for example. I need to see more proof. I wrote about it in my most recent evaluation.

@MarcPMarkets thanks for all your analysis here. I'm learning a lot from your explanations. One of your comment few days back about IOTA was that it should drop to 0.6 level for it to be in wave 2. It dropped much more (0.36) but I haven't seen double bottom reversal signals after that. So we expect one more drop before we start wave 3. Am I getting this correctly ? Thanks again for all your efforts. Means a lot to people like me who are just starting out

@MarcPMarkets Your analysis is really helpful..I am your new follower and admired at the way you analyze almost accurately.. any idea of how much low it can go based on the current movement.. I am trying to buy on a low compare to the current movement.. Is it worth a wait

@Manishere, I am glad you find my analysis helpful. I really can't answer that because the market needs to provide new information for me to consider. Right now, the current momentum is bearish so until that changes. I believe we can test the trople bottom support at least.